FTSE 100 fallers: why are the RBS and Smith & Nephew share prices down this week?
The British lender saw PPI claims hit profits, sending its stock lower this week, while the shares in UK-based medical supplier Smith & Nephew took a tumble after its CEO said he will step down at the end of the month.
Over the last five trading sessions, the FTSE 100 has gained more than 2%, with the blue-chip index dragged higher by top performers like food delivery service Just Eat and Mexican-based mining company Fresnillo. However, it wasn’t a great week for all members of the Footsie.
PPI hits RBS shares hard
Royal Bank of Scotland (RBS) has had a difficult week after reporting a disappointing set of Q3 results that saw it record a £8 million operating loss in the quarter compared with the £961 million it made this time last year.
The hit its bottom line suffered in Q3 is largely the result of a £900 million charge the lender incurred relating to its mis-selling of Payment Protection Insurance (PPI).
Without PPI, and other exceptional costs, the bank would have reported an operating profit of around £1 billion, though that figure would still fall far below market expectations.
RBS, like many other UK banks, is struggling in a particularly challenging environment for British lenders, with the mortgage market remaining competitive and interest rates remaining low.
As such, RBS’ shares have fallen more than 6% this week, closing at 225p, down 15p from where it opened on Monday. However, considering the myriad of challenges the lender faces, it has performed relatively well, with its shares up 4% on a year-to-date basis.
Looking to trade RBS and Smith & Nephew shares? Open a live or demo account with IG
Smith & Nephew shares suffer after CEO steps down
Shares in the medical equipment company fell by 8% in early trading on Monday after its CEO Namal Nawana announced he will step down at the end of the month ‘to pursue other opportunities outside of the UK’.
Despite the company and Nawana claiming the split was amicable, according to reports, the CEO was apparently dissatisfied after the medical device group refused to meet his pay demands.
Nawana will be replaced by former Roche Diagnostics boss Roland Diggelman.
The recent hit to Smith & Nephew’s share price represents a small blip, however, with the company’s stock climbing more than 30% over the last 12 months.
The company's strong run is owed in large part to Nawana’s strategy following a 10-year period of below market growth.
You can go long or short RBS and Smith & Nephew with IG using derivatives like CFDs.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
